What Did Zuckerberg Know? Lessons from Facebook’s Latest Scandal

Another day, another data scandal at Facebook. That such an attitude exists is a potential problem for many PR pros, who have made the platform a significant part of their communications plans.

Earlier this week, the Wall Street Journal reported Facebook uncovered emails allegedly proving Mark Zuckerberg knew of unscrupulous privacy practices at the social behemoth. Even though Facebook has battled data issues for about two years, there are PR lessons from this latest story.

Own Your Crises and Avoid Knee-Jerk Reactions

Zuckerberg and Facebook are in a no-win situation. The CEO should know of untoward privacy practices. If not, he appears out of the loop. At least, he should be made aware of them. Eventually, he should own such practices.

Thing is, Zuckerberg and COO Sheryl Sandberg are not fans of owning crises. Recall Zuckerberg’s initial reaction to reports that Russian agents used Facebook to influence the 2016 presidential elections. “A pretty crazy idea,” he said at first. Zuckerberg changed his tune later. In fact, he later turned over 3,000 ads to congressional investigators that Russian agents placed on Facebook.

The two also claimed ignorance when Facebook’s data practices started to make headlines in the wake of Cambridge Analytica last year.

Another example is the reaction to one aspect of The New York Times' blockbuster story in late November 2018. The story alleged that Facebook engaged a DC-based PR firm to uncover dirt on other tech giants and financier George Soros. Sandberg at first said she knew nothing about this. Eventually she had to change her tune. The PR firm was fired the day after the Times' article published.

CEOs and others should avoid knee-jerk reactions. Try not saying something in public that you're unable to prove.  It’s a bad look when a CEO and COO repeatedly are forced to backtrack on significant issues. In the least, it’s embarrassing. At worst, it could hurt the brand financially.

For example, Boeing’s CEO insisted for weeks that its 737 Max aircraft was safe. As more evidence was uncovered, the plane manufacturer has become less insistent about its claim. Boeing also booked no new orders in the latest quarter.

Dragging Out a Crisis Seldom Mitigates the Damage

When the C-suite does it best to kick the can on potential crises, there can’t be much hope for strong crisis management. An early step in crisis management is to admit a crisis possibly exists. The Times' Nov. 2018 article argues Facebook refused initially to accept the possibility that its data practices were problematic. When it eventually realized it had a problem, it was very late in the game.

The company's reaction to the latest data story seems to be more of the same. Instead of admitting that its data security is "deeply conflicted," as Michael Priem, founder/CEO of Modern Impact, tells us, it apparently tries to hide or obfuscate problems. "To  support advertising growth Facebook had to open up advertising units and data practices similar to publishers," Priem says. "The conflict is that the data is not news or content in the traditional sense...it's our personal information." Priem, though, isn't certain if Facebook and its leadership were "complicit in hiding data security issues or simply poor at sharing the vulnerabilities in their products in fear of user and market sentiment."

While Facebook’s size and resources can help it paper over many things, they’re not enough to rescue the brand from its bad (or nonexistent) crisis management at the outset of Cambridge Analytica.

Shady Sources Don't Excuse Your Brand's Behavior

From a journalistic viewpoint, this latest Facebook story seems shaky. The Journal admits it hasn’t seen the Zuckerberg emails. It quotes sources who say they’ve seen them.

Fair or not, when your brand is in crisis, every move you make is subject to scrutiny. In addition, media becomes extra-hungry to write stories about you. During a non-crisis moment, it’s very easy to see Journal editors holding the story until they could view the emails.

There’s a faction of Facebook shareholders who want to see Zuckerberg gone, or at least weakened. His handling of data crises is argument number one. Expect more unfavorable stories to surface based on unnamed sources.

Timing is Everything (Even for Facebook)

The timing of this story is awful for at least two reasons. If the latest Facebook scandal is true, it comes as the Federal Trade Commission (FTC) reportedly is readying a hefty fine against Facebook. This latest story could complicate that settlement. In addition to Facebook, Zuckerberg could face charges.

The company said in late April it expects FTC fines to total $3-$5 billion. Facebook set aside $3 billion in legal expenses related to the FTC investigation.

Even with a company as large as Facebook, when billion dollar amounts are thrown around, you’re talking serious dinero. Facebook has been nothing short of amazing in its recent financials. Still, billion dollar fines tend to cut into profits big time.

Nonetheless, Facebook's revenue rose 30% year over year in Q4. The social network continues to beat analyst expectations. From a business perspective, this is the definition of "too big to fail."

The second reason the timing of this latest story is awful is that it comes on the heels of Facebook's pivot. In March, Zuckerberg pledged to make Facebook more private and protect users.

The platform's growth and size suggest that communicators shouldn't abandon Facebook just yet. On the other hand, it’s possible that the platform will be pushed to operate and target users differently, particularly if antitrust discussions proceed. Prudent communicators are considering their options.

Seth Arenstein is editor of PRNEWS. Follow him: @skarenstein